March Forex reserves dip to $80.87B on weaker peso

The country’s dollar reserves fell to a three-month low of $80.87 billion in March partly due to a weaker peso, preliminary Bangko Sentral ng Pilipinas data released yesterday showed.

The gross international reserves (GIR) level last month was lower than February’s $81.44 billion and January’s $81.38 billion, although higher than end-2016’s $80.69 billion.

In a statement, BSP Governor Amando Tetangco Jr. mainly attributed the month-on-month drop to “outflows arising from the BSP’s foreign exchange operations and the payments made by the national government for its maturing foreign exchange obligations.”

The peso slid to the 50:$1 level, a more than 10-year low, since mid-February.

The decline in dollar reserves was nonetheless offset by “net foreign currency deposits by the national government and revaluation adjustments on the BSP’s gold holdings resulting from the increase in the price of gold in the international market,” Tetangco said.

The GIR as of end-March can cover 8.9 months’ worth of imports of goods as well as payments of primary income and services.

The dollar reserves were likewise equivalent to 5.2 times the short-term external debt based on original maturity and 3.9 times based on residual maturity. The BSP defines short-term debt based on residual maturity as outstanding foreign debt whose original maturity was a year or less, plus principal payments on medium- and long-term loans of the government as well as the private sector that were due within the next 12 months.

As for net international reserves, or the difference between the GIR and total short-term liabilities, these also decreased to $80.86 billion in March from $81.43 billion a month ago.

For 2017, the BSP had projected dollar reserves to rise to $84.7 billion, equivalent to 8.8 months’ worth of imports. —BEN O. DE VERA